These Regulations are made in exercise of the power in sections 51(1)(a), 52(2) and 56(1) of the Taxation (Cross-border Trade Act 2018 (c. 22) (“TCTA 2018”) in consequence of, or otherwise in connection with, the withdrawal of the United Kingdom from the European Union and in consequence of TCTA 2018. They are to come into force on such day as the Treasury by regulations may appoint.

The Regulations make provision in relation to accounting and payment for import VAT on the importation of goods by persons registered for VAT.

Regulation 1 provides for commencement and regulation 2 lists definitions used in the Regulations.

Regulation 3 provides that a person registered for VAT and liable to pay import VAT on relevant imported goods may have any such goods delivered or removed without payment of import VAT where that person accounts for the import VAT under the Regulations. This regulation also modifies the application of section 16(2) of the Value Added Tax Act 1994 (“VATA”) (which provides for import VAT on the importation of goods to be charged and payable as if it were import duty within Part 1 of TCTA 2018).

Regulation 4 provides that a person registered for VAT and choosing to account for import VAT under these Regulations may do so on the return that person is required to make for a prescribed accounting period provided that the conditions in regulation 5 are met.

Regulation 5 sets out the conditions to be met for the application of regulation 4. A registered person's value added tax registration number must be shown on a declaration for the free circulation procedure that that person makes on the importation of goods in accordance with Part 1 of TCTA 2018. Where relevant goods are declared for a special customs procedure, the registered person must comply with requirements imposed by or under that Part.

Regulation 6 provides that a person to whom the Regulations apply is required to account for import VAT on the person's return for a prescribed accounting period if the person has not otherwise accounted for it by the due date for furnishing that return, and is presumed to be so required for the purposes of VATA.

Regulations 7 and 8 modify respectively the application of regulation 28 of the VAT Regulations 1995 (S.I. 1995/2518) (“the Principal Regulations”) and section 78 of VATA for the purposes of the Regulations.

Regulation 9 allows Her Majesty's Revenue and Customs (“HMRC”) to direct that a person registered for VAT may not account for and pay import VAT under the Regulations if they consider it necessary to do so for the protection of the revenue. Such a direction must be notified in writing and takes effect from a day not earlier than the date of the direction.

Regulations 10 and 11 provide for a right of appeal to the tribunal against a decision of HMRC made under regulation 8 or 9 and applies Part 5 of VATA (“Reviews and Appeals”) for the purposes of the Regulations.

Regulation 12 amends and omits certain provisions in the Principal Regulations.

This instrument will be covered by an overarching HMRC impact assessment (second edition) which will be published and available on the website https://www.gov.uk/government/collections/customs-vat-and-excise-regulations-leaving-the-eu-with-no-deal.